VEECO INSTRUMENTS INCd1lge852tjjqow.cloudfront.net/CIK-0000103145/50e68...Veeco Instruments Inc. manufactures enabling soluti ons for customers in the HB-LED, solar, data storag e,

VEECO INSTRUMENTS INC

FORM 8-K(Current report filing)

Filed 02/08/10 for the Period Ending 02/08/10

Address TERMINAL DRIVE

PLAINVIEW, NY 11803Telephone 516 677-0200

CIK 0000103145Symbol VECO

SIC Code 3559 - Special Industry Machinery, Not Elsewhere ClassifiedIndustry Semiconductors

Sector TechnologyFiscal Year 12/31

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 8 , 2010

VEECO INSTRUMENTS INC. ( Exact name of registrant as specified in its charter )

Terminal Drive, Plainview, New York 11803

(Address of principal executive offices)

(516) 677-0200 (Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): � Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) � Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) � Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) � Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Delaware (State or other jurisdiction

of incorporation)

0-16244 (Commission File Number)

11-2989601 (IRS Employer Identification No.)

Section 2 - Financial Information Item 2.02 Results of Operations and Financial Condition.

On February 8, 2010, Veeco Instruments Inc. (“Veeco” or the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2009 . In connection with the release and the related conference call, Veeco posted a presentation relating to its fourth quarter 2009 financial results on its website (www.veeco.com) . Copies of the press release and presentation are furnished as Exhibit 99.1 and Exhibit 99.2 to this report. Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits. (d) Exhibits .

The information in this report, including exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities

Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, nor shall this information or these exhibits be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

1

Exhibit Description

99.1

Press release issued by Veeco Instruments Inc. dated February 8, 2010 99.2

Veeco Instruments Inc. Q4 2009 Highlights dated February 8, 2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the

undersigned hereunto duly authorized.

2

VEECO INSTRUMENTS INC.

February 8, 2010 By:

/s/ Gregory A. Robbins

Gregory A. Robbins

Senior Vice President and General Counsel

EXHIBIT INDEX

3

Exhibit Description

99.1

Press release issued by Veeco Instruments Inc. dated February 8, 2010 99.2

Veeco Instruments Inc. Q4 2009 Highlights dated February 8, 2010

EXHIBIT 99.1

Veeco Instruments Inc., Terminal Drive, Plainview, NY 11803 Tel. 516-677-0200 Fax. 516-677-0380 FOR IMMEDIATE RELEASE Financial Contact: Debra Wasser, SVP Investor Relations & Corporate Communications, 516-677-0200 x1472 Media Contact: Fran Brennen, Senior Director Marcom, 516-677-0200 x1222

VEECO ANNOUNCES Q4 AND 2009 FINANCIAL RESULTS

Plainview, NY, February 8, 2010 — Veeco Instruments Inc. (Nasdaq: VECO) announced its financial results for the fourth quarter and full year ended December 31, 2009. Veeco will host a conference call reviewing these results at 5:00pm today at 877-675-4757 (toll-free) or 719-325-4807 using passcode 9142083. The call will also be webcast live at www.veeco.com. A replay of the call will be available beginning at 8:00pm tonight through midnight on February 22, 2010 at 888-203-1112 or 719-457-0820 using passcode 9142083, or on the Veeco website. A slide presentation reviewing these results has also been posted on our website. Veeco reports its results on a generally accepted accounting principles (“GAAP”) basis, and also provides results excluding certain items. Please refer to the attached table for details of the reconciliation between GAAP operating results and Non-GAAP operating results. GAAP Results ($M except EPS)

Non-GAAP Results ($M except EPS)

John R. Peeler, Veeco’s Chief Executive Officer, commented, “We are pleased to report these excellent fourth quarter results. Our fourth quarter revenue was $146 million, a record level for Veeco, increasing 33% from the fourth quarter of 2008 and 48% sequentially. This strong revenue drove EBITA of $25.1 million, GAAP EPS of $0.50 per share, and non-GAAP EPS of $0.41 per share. Fourth quarter LED & Solar revenues were a record $98 million, with MOCVD revenues more than doubling on a sequential basis. All three of our businesses, LED & Solar, Data Storage, and Metrology reported improved sequential gross margins, with overall Veeco margins increasing to 45%. Veeco generated $37 million in cash from operations during the fourth quarter.” “Veeco’s fourth quarter 2009 orders were $262 million, surpassing our prior record of $226 million achieved in the third quarter by 16% and nearly 200% higher than the fourth quarter of 2008,” continued Mr. Peeler. “LED & Solar orders were $177 million, with sixteen LED manufacturers placing orders for TurboDisc® Metal Organic Chemical Vapor Deposition (MOCVD) Systems during the quarter. We continued to see strong MOCVD demand as LED manufacturers ramp production for laptop and TV backlighting as well as general illumination. Data Storage orders were $53 million, up over 200% sequentially, as hard drive customers invested in Veeco’s market leading front-end etch and deposition systems and back-end processing tools for technology and capacity requirements. In Metrology we booked $32 million, our best order performance in six quarters, with excellent customer traction for our newest generation instruments, particularly our Dimension® Icon® Atomic Force Microscope, and improvement overall in research and industrial customers’ spending patterns. It is particularly gratifying to end 2009 with such strong bookings levels in all three Veeco businesses.”

-more- 1

NEWS

Q4 ‘09 Q4 ‘08

2009 2008

Revenues

$ 146.4 $ 110.3

$ 380.1 $ 442.8

Net income (loss)

$ 18.7 $ (74.0 ) $ (15.6 ) $ (75.2 )

EPS $ 0.50

$ (2.35 ) $ (0.48 ) $ (2.40 )

Q4 ‘09 Q4 ‘08

2009 2008

EBITA

$ 25.1 $ 8.0

$ 18.0 $ 36.0

EPS

$ 0.41 $ 0.15

$ 0.27 $ 0.67

Outlook Regarding Veeco’s outlook, Mr. Peeler commented, “With record backlog of $402 million at the end of December, Veeco begins 2010 with unprecedented momentum. Business patterns in LED remain very strong in the first quarter, similar to what we experienced in the latter half of 2009, with multi-tool system orders being quoted to a large number of customers. Leading global LED manufacturers are showing strong interest in our newly introduced TurboDisc K465i™ GaN MOCVD System, which we believe is the best product on the market today. We are increasing manufacturing capacity to satisfy customer demand, with a current plan to ramp capacity to 45 or more tools this quarter and approximately 70 by the second quarter. Our highest priority is to satisfy our customers with on-time deliveries and world-class customer support of their manufacturing ramps.” “We believe our Data Storage business, with its dramatically lowered breakeven structure and backlog of $60 million ending 2009, is in excellent position starting 2010,” added Mr. Peeler. “We remain well-aligned with our key customers and plan to introduce new technologies to continue to advance areal densities for thin film magnetic heads. In Metrology, our new product pipeline is the best it’s been in years, and the business returned to profitability in both Q3 and Q4 2009. We currently expect all three Veeco businesses to grow revenues and profits in 2010.” Q1’10 Guidance Veeco’s first quarter 2010 revenues are currently forecasted to be between $150-$165 million, with earnings per share between $0.50 to $0.62 on a GAAP basis and $0.41 to $0.50 on a non-GAAP basis. Please refer to the attached financial tables for more details. About Veeco Veeco Instruments Inc. manufactures enabling solutions for customers in the HB-LED, solar, data storage, semiconductor, scientific research and industrial markets. We have leading technology positions in our three businesses: LED & Solar Process Equipment, Data Storage Process Equipment, and Metrology Instruments. Veeco’s manufacturing and engineering facilities are located in New York, New Jersey, California, Colorado, Arizona, Massachusetts and Minnesota. Global sales and service offices are located throughout the U.S., Europe, Japan and APAC. http://www.veeco.com/ To the extent that this news release discusses expectations or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include the risks discussed in the Business Description and Management’s Discussion and Analysis sections of Veeco’s Annual Report on Form 10-K for the year ended December 31, 2008 and in our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and press releases. Veeco does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

- financial tables attached- 2

Veeco Instruments Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (In thousands, except per share data)

3

Three months ended Year ended

December 31,

December 31,

2009 2008

2009 2008

(Unaudited)

(Unaudited) (Unaudited)

Net sales

$ 146,367 $ 110,344

$ 380,149 $ 442,809

Cost of sales

80,479 70,189

228,587 266,215

Gross profit

65,888 40,155

151,562 176,594

Operating expenses:

Selling, general and administrative expense

25,984 22,310

85,455 92,838

Research and development expense

17,660 15,180

57,430 60,353

Amortization expense

1,901 3,215

7,338 10,745

Restructuring expense

113 3,567

7,680 10,562

Asset impairment charge

— 73,037

304 73,322

Other (income) expense, net

(307 ) (77 ) 790 (668 )

Total operating expenses 45,351

117,232 158,997

247,152

Operating income (loss)

20,537 (77,077 ) (7,435 ) (70,558 )

Interest expense, net

1,787 1,632

6,850 6,729

Gain on extinguishment of debt

— (3,758 ) —

(3,758 ) Income (loss) before income taxes

18,750 (74,951 ) (14,285 ) (73,529 )

Income tax provision (benefit) 5

(968 ) 1,347 1,892

Net income (loss) including noncontrolling interest

18,745 (73,983 ) (15,632 ) (75,421 )

Net loss attributable to noncontrolling interest —

(30 ) (65 ) (230 ) Net income (loss) attributable to Veeco

$ 18,745 $ (73,953 ) $ (15,567 ) $ (75,191 )

Income (loss) per common share:

Net income (loss) attributable to Veeco

$ 0.53 $ (2.35 ) $ (0.48 ) $ (2.40 )

Diluted net income (loss) attributable to Veeco $ 0.50

$ (2.35 ) $ (0.48 ) $ (2.40 ) Weighted average shares outstanding

35,623 31,500

32,628 31,347

Diluted weighted average shares outstanding

37,742 31,500

32,628 31,347

Veeco Instruments Inc. and Subsidiaries Condensed Consolidated Balance Sheets

(In thousands)

4

December 31, December 31,

2009

2008

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents $ 148,589

$ 103,799

Short-term investments 135,000

—

Accounts receivable, net 84,358

59,659

Inventories, net 77,564

94,930

Prepaid expenses and other current assets 7,819

6,425

Deferred income taxes 3,105

2,185

Total current assets 456,435

266,998

Property, plant and equipment, net

59,389 64,372

Goodwill

59,422 59,160

Other assets, net

30,126 39,011

Total assets

$ 605,372 $ 429,541

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$ 29,112 $ 29,610

Accrued expenses

106,445 66,964

Deferred profit

2,520 1,346

Current portion of long-term debt

212 196

Income taxes payable

829 354

Total current liabilities

139,118 98,470

Deferred income taxes

5,039 4,540

Long-term debt

100,964 98,330

Other non-current liabilities

1,192 2,391

Total non-current liabilities

107,195 105,261

Equity attributable to Veeco 359,059

225,026

Noncontrolling interest —

784

Total equity 359,059

225,810

Total liabilities and equity

$ 605,372 $ 429,541


Reconciliation of operating income (loss) to earnings excluding certain items (In thousands, except per share data)

(Unaudited)

NOTE - The above reconciliation is intended to present Veeco’s operating results, excluding certain items and providing income taxes at a 35% statutory rate. This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United States, and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its


December 31,

December 31,

2009 2008

2009 2008

Operating income (loss)

$ 20,537 $ (77,077 ) $ (7,435 ) $ (70,558 )

Adjustments:


1,901 3,215

7,338 10,745

Equity-based compensation expense

2,584 1,838

8,537 7,509


113 3,567

7,680 (1) 10,562 (2) Purchase accounting adjustment

— 565

— 1,492 (3)

Inventory write-off —

2,900 1,526 (4) 2,900 (5)

Asset impairment charge —

73,037 304 (6) 73,322 (7)

Earnings before interest, income taxes and amortization excluding certain

items (“EBITA” ) 25,135

8,045 17,950

35,972


1,787 1,632

6,850 6,729

Gain on extinguishment of debt

— (3,758 ) —

(3,758 ) Adjustment to exclude gain on extinguishment of debt

— 3,758

— 3,758

Adjustment to add back non-cash portion of interest expense

(732 ) (8) (734 ) (8) (2,846 ) (8) (2,918 (8) Earnings excluding certain items before income taxes

24,080 7,147

13,946 32,161

Income tax provision at 35%

8,428 2,501

4,881 11,256

Earnings excluding certain items

15,652 4,646

9,065 20,905

Loss attributable to noncontrolling interest, net of income tax benefit at

35% —

(20 ) (42 ) (150 ) Earnings excluding certain items attributable to Veeco

$ 15,652 $ 4,665

$ 9,107 $ 21,054

Earnings excluding certain items per diluted share attributable to Veeco

$ 0.41 $ 0.15

$ 0.27 $ 0.67


37,742 31,564

33,389 31,516

(1)

During the year ended December 31, 2009, the Company recorded a restructuring charge of $7.7 million, of which $0.1 million was recorded during the fourth quarter. These restructuring charges consisted principally of $6.3 million of personnel severance costs, $0.9 million of lease-related charges and $0.5 million of moving and consolidation costs associated with vacating two facilities in our Data Storage Process Equipment segment.

(2)

During 2008, the Company recorded a restructuring charge of $10.6 million, of which $3.6 million was incurred during the fourth quarter, $4.1 million was incurred during the third quarter and $2.9 million was incurred during the first quarter. These restructuring charges consisted of personnel severance costs and lease-related commitments.

(3)

During 2008, the Company recorded $1.5 million in cost of sales related to the acquisition of Mill Lane Engineering, of which $0.6 million was recorded during the fourth quarter. This was the result of purchase accounting, which requires adjustments to capitalize inventory at fair value.

(4)

During the first quarter of 2009, the Company recorded a $1.5 million inventory write-off in our Data Storage Process Equipment segment associated with the discontinuance of certain products. This charge was included in cost of sales in the GAAP income statement.

(5)

During the fourth quarter of 2008, the Company recorded a $2.9 million inventory write-off in its Metrology segment associated with legacy semiconductor products. This was included in cost of sales in the GAAP income statement.

(6)

During the second quarter of 2009, the Company recorded a $0.3 million asset impairment charge in our Data Storage Process Equipment segment for assets no longer being utilized.

(7)

During 2008, the Company recorded a $73.3 million asset impairment charge, of which $73.0 million was recorded during the fourth quarter and $0.3 million was recorded during the first quarter. The fourth quarter charge consisted of $52.3 million related to goodwill and $20.7 million related to other long-lived assets. The first quarter charge consisted of $0.3 million related to fixed asset write-offs associated with the consolidation and relocation of our Corporate headquarters.

(8)

Adjustment to exclude non-cash interest expense on convertible subordinated notes.

business units based on EBITA, which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes EBITA reports baseline performance and thus provides useful information.

5


Reconciliation of operating income to income excluding certain items (In thousands, except per share data)

(Unaudited)

NOTE - The above reconciliation is intended to present Veeco’s operating results, excluding certain items and providing income taxes at a 35% statutory rate. This reconciliation is not in accordance with, or an alternative method for, generally accepted accounting principles in the United States, and may be different from similar measures presented by other companies. Management of the Company evaluates performance of its business units based on earnings before interest, income taxes and amortization excluding certain items (“EBITA”), which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management of the Company believes EBITA reports baseline performance and thus provides useful information.

6

Guidance for the three

months ended March 31, 2010

LOW HIGH

Operating income

$ 23,663 $ 29,128

Adjustments:


1,721 1,721


2,233 2,233

Income before interest, income taxes and amortization excluding certain items (“EBITA”) 27,617

33,082


1,699 1,699

Adjustment to add back non-cash portion of interest expense

(741 ) (1) (741 ) (1) Income excluding certain items before income taxes

26,659 32,124

Income tax expense at 35%

9,331 11,243

Income excluding certain items

$ 17,328 $ 20,881

Income per diluted share excluding certain items

$ 0.41 $ 0.50


42,000 42,000

(1) Adjustment to exclude non-cash interest expense on convertible subordinated notes.


Segment Bookings, Revenues, and Reconciliation of Operating income (loss) to EBITA **

(In thousands) (Unaudited)

** Refer to footnotes on ‘Reconciliation of operating income (loss) to earnings excluding certain items’ for further details. 7


December 31,

December 31,

2009 2008

2009 2008

LED & Solar Process Equipment

Bookings

$ 176,692 $ 43,649

$ 440,784 $ 160,162

Revenues

$ 98,103 $ 37,608

$ 205,153 $ 165,812

Operating income $ 25,442

$ 783 $ 26,763

$ 19,616

Amortization expense 796

1,587 3,137

4,627

Equity-based compensation expense 739

172 1,358

495

Restructuring expense 67

725 1,196

732

Purchase accounting adjustment —

565 —

1,492

EBITA ** $ 27,044

$ 3,832 $ 32,454

$ 26,962

Data Storage Process Equipment

Bookings

$ 53,118 $ 13,968

$ 97,497 $ 138,653

Revenues

$ 21,040 $ 45,026

$ 77,259 $ 149,123

Operating income (loss) $ 703

$ (42,877 ) $ (7,430 ) $ (35,411 ) Amortization expense

386 934

1,599 3,790


128 297

1,020 990


(49 ) 272 3,006

396

Inventory write-off —

— 1,526

—

Asset impairment charge —

51,102 304

51,102

EBITA ** $ 1,168

$ 9,728 $ 25

$ 20,867

Metrology

Bookings

$ 32,375 $ 30,884

$ 101,261 $ 125,622

Revenues

$ 27,224 $ 27,710

$ 97,737 $ 127,874

Operating income (loss) $ 681


508 585

2,170 1,880


143 261

990 858


46 511

2,843 1,138

Inventory write-off

— 2,900

— 2,900


— 21,935

— 21,935

EBITA (Loss) **

$ 1,378 $ (3,852 ) $ (3,931 ) $ (2,637 )

Unallocated Corporate

Operating (loss) income

$ (6,289 ) $ (4,939 ) $ (16,834 ) $ (23,415 ) Amortization expense

211 109

432 448


1,574 1,108

5,169 5,166


49 2,059

635 8,296


— —

— 285

Loss **

$ (4,455 ) $ (1,663 ) $ (10,598 ) $ (9,220 ) Total

Bookings

$ 262,185 $ 88,501

$ 639,542 $ 424,437

Revenues

$ 146,367 $ 110,344

$ 380,149 $ 442,809

Operating income (loss) $ 20,537


1,901 3,215

7,338 10,745


2,584 1,838

8,537 7,509


113 3,567

7,680 10,562

Purchase accounting adjustment

— 565

— 1,492

Inventory write-off

— 2,900

1,526 2,900


— 73,037

304 73,322

EBITA **

$ 25,135 $ 8,045

$ 17,950 $ 35,972

Exhibit 99.2

Q4 2009 Highlights February 8, 2010

Q409 Highlights

Fourth Quarter 2009 Highlights: Exceeded Guidance in a ll Areas Revenue was $146.4 mi llion, up 33% compared to $110.3 million in Q4’08. Revenue increased 48% sequentia lly Bookings were $262.2 million, surpassi ng our pr ior record level of $225.6 mi llion; December 31 backlog was $402 milli on Ne t income was $18.7 million, or $0.50 pe r sha re , compared to net loss of ($74.0) mi llion, or ($2.35) per sha re , in Q4 ’08 Veeco ’s earnings per sha re , excluding certa in items, was $0.41 compared to earnings per sha re of $0.15 in Q4’08 A ll three businesses were profi table

Fourth Quarter 2009 H ighlights: Exceeded Guidance in a ll Areas (conti nued) Operat ing expenses $43.3 mi llion Up $8.9M sequentia lly from bonus/profit sha ri ng, se lling expenses and LED & S olar R&D for next generation tools OPEX down sequentia lly as a pe rcentage of sales from 34.8% to 29.6% Q4’09 gross margi ns were 45% , ahead of guidance of 43-44% ; all t hree businesses reported sequentia l GM improvement Strong cash and ba lance shee t pe rformance : Company generated $37M in cash from opera tions Proceeds of $130M from equity offer ing (October 2009) Record inventory turnover of 4.2 times

Q4 2009 Financ ial Highlights $0.15 $0.16 $0.41 EPS (Non-GAAP ) $8.0 $8.9 $25.1 EBITA ($77.1) $3.5 $20.5 Operat ing Income (Loss) 39.5% 41.4% 45.0% Gross Margin $110.3 $98.9 $146.4 Revenues $88.5 $225.6 $262.2 Orders Q4 ’08 Q3’09 Q4’09 ($M except EPS) See reconcili ation to GAAP at end of presentati on

LED & S olar Grows As Percentage of Veeco: F ourth Quarte r Results LED & Solar Proces s Equipment Da ta St orage Process Equipment LED & S olar Process Equipment Da ta St orage Process Equipment (67%) (19% ) (68%) (20% ) (12%) Q4 09 Revenues ($M) $146 Mi llion Q4 09 Bookings ($M) $262 Million Metrol ogy Metrol ogy (14%) $32 $177 $53 $21 $98 $27

Q4 ‘09 S egment Performance (Sequentia l Change) 8.9 25.1 48% 98.9 146.4 16% 225.6 262.2 Veeco Total (2.7) (4.5) -- -- -- -- Unal locat ed Corporate 0.4 1.4 13% 24.2 27.3 11% 29.2 32.4 Metrol ogy 1.6 1.2 -3% 21.7 21.0 209% 17.2 53.1 Data Storage EBITA Revenue Bookings 179.2 Q3’09 98.1 Q4’09 53.0 Q3’09 85% Change 27.0 Q4’09 9.6 -1% 176.7 LED & Solar Q3 ’09 Change Q4’09 $M A ll Segment s Prof itabl e in Q3 and Q4 See reconcili ation to GAAP at end of presentati on

Record Q4’09 Bookings Q4’09 bookings $262.2M, up 16% sequentia lly and nearly 200% hi gher than pr ior year LED & Solar: $177M in orders wi th 16 LED manufacturers pl aci ng orders for Veeco MOCVD Accel erating demand for TV and laptop backlighting Genera l illuminati on in “ear ly innings” Da ta St orage : Strong recovery of $53M; orders up over 200% sequentia lly as key hard dr ive customers invested in Veeco technology for front and back-end applications Metrol ogy: Orders $32M, best orde r quarte r in s ix quarte rs due to new product trac tion and modest improvement in scient ific research and indust ria l spending Q4 book to bill 1.79 to 1.00

------- ------- $135.0 Short -term Invest ments $359.1 $101.2 $605.4 $59.4 $317.3 $148.6 12/31/2009 12/31/2008 9/ 30/2009 $225.8 $198.1 Shareholder’s Equity $98.5 $100.5 Long-Term Debt (inc ludi ng current portion) $429.5 $409.8 Tota l Asse ts $64.4 $59.3 Fixed Assets, Net $168.5 $154.5 Working Capital $103.8 $109.4 Cash Equi va lent s Veeco Ba lance Shee t (in mi llions)

2009 Full Year Highlights

Veeco 2009 Accomplishments Summary Executed an Aggressive Restructur ing Program Mai nt ained posit ive operati ng cash f low throughout t he sharpest downturn in t he history of the industry Crea ted a leaner st ruct ure w ith a higher percentage va ri able cost to substantia lly improve profitability Strengthened t he Balance S heet though Complet ion of Secondary Offe ring, Aggressive C ost Cont rol and Improved Working Capita l Management Rebal anced Business Portfol io Rea ligned resources and management focus in favor of stra tegic grow th areas

FY 2009 FY 2008 LED & Solar Grows As Percentage of Veeco: Full Year 2009 Results Bookings Revenue $425M $640M $443M $380M Data St orage $149M 34% of Tota l Me trol ogy $128M 29% of Tota l LED & Solar $166M 37% of Total Da ta St orage $139M 32% of Tota l Me trol ogy $126M 30% of Tota l LED & Solar $160M 38% of Total LED & S olar $205M 54% of Tota l Me trol ogy $98M 26% of Tota l Da ta Storage $77M 20% of Total LED & S olar $441M 69% of Tota l Me trol ogy $101M 16% of Tota l Da ta Storage $98M 15% of Total

2009 – Orders, Sales and Profit Improve in Every Quart er 17.2% 25,136 29.6% 43,335 17,660 25,675 45.0% 65,888 146,367 262,185 Q4’09 4.7% 9.0% (8.8)% (15.4)% % 17,950 8,857 (6,371) (9,672) EBITA 37.8% 34.8% 45.7% 52.5% % 143,674 34,451 32,910 32,978 OPEX 57,430 13,721 13,163 12,886 R&D 86,244 20,730 19,747 20,092 SG&A 40.3% 41.4% 33.9% 34.9% % 153,090 40,909 24,385 21,908 Gross Prof it 380,150 98,914 72,020 62,849 Sales 639,542 225,636 98,671 53,050 Orders FY Q3’09 Q2’09 Q1’09 Actua l (000’s) See reconcili ation to GAAP at end of presentati on

2009 Restructur ing and Top Line Recovery Impact All Key Metrics See reconcili ation to GAAP at end of presentati on Tota l Sa les ($M) 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 EBITA % -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Gross Margin % 0 10 20 30 40 50 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09

Q1 2010 Guidance and Outlook

Q1 2010 Guidance Revenues $150 – 165 milli on GAAP EP S $0.50 – $0.62 per share Non -GAAP EP S $0.41 – $0.50 (utili zing 35% tax ra te) [Note: S hare Count 42M Diluted/38.5M non -Diluted] S ee reconcili ation to GAAP at end of presentati on

Restructur ing Ac tivities & Top Line Recovery Drive Si gnif icant EBITA Improvement 17% $43M 45% $146M Q4’09A 18 -20% $39 -$41M 43-44% $150-165M Q1’10 F orecast (9%) $33M 34% $72M Q2 ‘09A 9% (15% ) 7% EBITA% $34M $33M $37M Operat ing Spending 41% 35% 40% GM $99M $63M $110M Revenue Q3 ’09A Q1 ‘09A Q4 ‘08A See reconcili ation to GAAP at end of presentati on

Business Outlook: Improving 2010 Revenue and Prof it in A ll Three Businesses Veeco begi ns 2010 w ith unprecedented momentum: ended 2009 w ith record level of backlog of $402 mi llion: $317M LED & S olar; $60M Data Storage; $25M Metrol ogy LED & S olar business pa tte rns remai n strong in Q1: Simila r to what we experienced in the lat ter half of 2009 Multi -tool syst em orde rs be ing quoted across a la rge number of customers Strong interest in our newl y i nt roduced K465i MOC VD syst em Inc reasing manufactur ing capacity to sa tisfy customer demand: Q1 45 tools or more; Q2 goal 70 tool s Putting pl ans in place to ge t to 120 t ool capacity by Q4 as marke t requires Da ta St orage business in exce llent positi on starting 2010 Metrol ogy outl ook favorable with strong new product pipel ine and lower cost struc ture

Back-up and Reconc ilia tion Da ta

Stat ements of Operat ions ( in Thousands, except pe r sha re data ) 31,347 32,628 31,500 37,742 Diluted we ighted average shares outst anding 31,347 32,628 31,500 35,623 Weighted average shares outstanding ($2.40) ($0.48) ($2.35) $0.50 Diluted net income ( loss) attr ibutable to Veeco ($2.40) ($0.48) ($2.35) $0.53 Net income (loss) attr ibutabl e to Veeco Income (loss) per common share : $ (75,191) $ (15,567) $ (73,953) $ 18,745 Ne t income ( loss) attr ibutable to Veeco (230) (65) (30) - Ne t loss attr ibutable to noncontrolling interest (75,421) (15,632) (73,983) 18,745 Ne t income ( loss) including noncontrolling interest 1,892 1,347 (968) 5 Income tax provision (benef it) (73,529) (14,285) (74,951) 18,750 Income (loss) be fore income taxes (3,758) - (3,758) - Ga in on extinguishment of debt 6,729 6,850 1,632 1,787 Inte rest expense , ne t (70,558) (7,435) (77,077) 20,537 Opera ting income ( loss) 247,152 158,997 117,232 45,351 Tota l operating expenses (668) 790 (77) (307) Othe r ( income) expense, ne t 73,322 304 73,037 - Asse t impa irment cha rge 10,562 7,680 3,567 113 Restructur ing expense 10,745 7,338 3,215 1,901 Amortiza tion expense 60,353 57,430 15,180 17,660 Research and development expense 92,838 85,455 22,310 25,984 Se lling, general and administrative expense Operat ing expenses : 176,594 151,562 40,155 65,888 Gross profi t 266,215 228,587 70,189 80,479 Cost of sales $ 442,809 $ 380,149 $ 110,344 $ 146,367 Ne t sales (Unaudited) (Unaudited) (Unaudited) 2008 2009 2008 2009 December 31, December 31, Year ended Three months ended

Balance S heet s (In thousands) $ 429,541 $ 605,372 Tota l liabili ties and equity 225,810 359,059 Tota l equity 784 - Noncontrolling interest 225,026 359,059 Equity attr ibutable to Veeco 105,261 107,195 Tota l non -current liabili ties 2,391 1,192 O ther non -current l iabilit ies 98,330 100,964 Long-term debt 4,540 5,039 De fe rred income taxes 98,470 139,118 Tota l current l iabilit ies 354 829 Income taxes payable 196 212 Current portion of long -term debt 1,346 2,520 Deferred profi t 66,964 106,445 Accrued expenses $ 29,610 $ 29,112 Accounts payable Current liabili ties: LIAB ILITIES AND EQUITY $ 429,541 $ 605,372 Tota l asset s 39,011 30,126 Ot her asset s, ne t 59,160 59,422 Goodw ill 64,372 59,389 Property, plant and equipment, ne t 266,998 456,435 Tota l current assets 2,185 3,105 De fe rred income taxes 6,425 7,819 Prepaid expenses and other current asset s 94,930 77,564 Inventor ies, ne t 59,659 84,358 Accounts recei vable, ne t - 135,000 Short -term investment s $ 103,799 $ 148,589 Cash and cash equivalents Current assets: (Unaudited) ASS ETS 2008 2009 December 31, December 31,

Reconc ilia tion - Unaudited (In thousands, except pe r sha re data ) During t he year ended December 31, 2009, the Company recorded a restruc turing charge of $7.7 mi llion, of which $0.1 milli on was recorded during the fourth quarter. These restruc turing charges consi sted pr inci pa lly of $6.3 mi llion of pe rsonne l severance cost s, $0.9 milli on of lease-re lated charges and $0.5 mi llion of moving and consolidat ion costs assoc iat ed with vacat ing t wo facilit ies in our Da ta St orage Process Equipment segment. During 2008, the Company recorded a restruc turing charge of $10.6 mi llion, of which $3.6 milli on was incurred during the fourth quarter, $4.1 milli on was incurred during the third quarte r and $2.9 mill ion was incurred during the f irst quarte r. These restruc turing charges consi sted of personnel severance cost s and lease-re lated commitments. During 2008, the Company recorded $1.5 mi llion in cost of sales re lated to the acquisit ion of Mill Lane Engi neering, of whi ch $0.6 mi llion was recorded during the fourth quarter. This was the result of purchase account ing, which requires adjustments t o capit alize inventory a t fa ir va lue. During the first quarter of 2009, the Company recorded a $1.5 mi llion inventory write -off in our Da ta St orage Process Equipment segment associa ted w ith the discontinuance of ce rt ain products. This charge was included in cost of sales in t he GAAP income sta tement. During t he fourth quarte r of 2008, the Company recorded a $2.9 mi llion inventory write -off in i ts Me trol ogy segment associa ted w ith legacy semiconduct or products. This was included in cost of sales in t he GAAP income sta tement. During t he second quarte r of 2009, the Company recorded a $0.3 mi llion asse t impa irment cha rge in our Da ta Storage Process Equipment segment for assets no longer being ut ilized. During 2008, the Company recorded a $73.3 mi llion asse t impa irment charge, of which $73.0 million was recorded during the fourth quarter and $0.3 mill ion was recorded during the f irst quarte r. The fourth quarte r charge consisted of $52.3 mi llion re lat ed to goodw ill and $20.7 million re lated to ot he r long -lived asse ts. The f irst quarter charge consis ted of $0.3 mi llion re lated to f ixed asset write -offs associa ted w ith the consolida tion and re loca tion of our Corporate headquarte rs. Adjustment to exclude non -cash interest expense on converti bl e subordinated notes. NOTE: The above reconcili ation is intended to present Veeco's opera ting results, excluding ce rt ain items and providing income taxes a t a 35% statutory ra te. This reconcili ation is not in accordance with, or an alte rna tive method for, generally accepted account ing pr inci pl es in the United Stat es, and may be dif fe rent from si milar measures presented by other companies. Management of the Company evalua tes pe rformance of its business units based on EBITA , which i s the pr imary indica tor used to plan and forecast fut ure pe ri ods. The presentati on of this financia l measure fac ilita tes meaningful comparison with pr ior pe ri ods, as management of the Company be lieves EBITA reports base line pe rformance and thus provides use ful information. 31,516 33,389 31,564 37,742 Diluted we ighted average shares outst anding $0.67 $0.27 $0.15 $0.41 Earnings excluding ce rt ain items per diluted share att ributable to Veeco $21,054 $9,107 $4,665 $15,652 Earnings excluding ce rt ain items a ttri but able to Veeco (150) (42) (20) - Loss attr ibutable to noncontrolling interest, ne t of income tax benef it at 35% 20,905 9,065 4,646 15,652 Earni ngs excluding ce rt ain items 11,256 4,881 2,501 8,428 Income tax provision at 35% 32,161 13,946 7,147 24,080 Earnings excluding ce rt ain items before income taxes (8) (2,918) (8) (2,846) (8) (734) (8) (732) Adjustment to add back non-cash portion of inte rest expense 3,758 - 3,758 - Adjustment to exclude ga in on extinguishment of debt (3,758) - (3,758) - Ga in on extinguishment of debt 6,729 6,850 1,632 1,787 Inte rest expense , ne t 35,972 17,950 8,045 25,135 excluding ce rt ain items ("EBITA") Earnings before interest, income taxes and amort iza tion (7) 73,322 (6) 304 73,037 - Asse t impa irment cha rge (5) 2,900 (4) 1,526 2,900 - Inventory write -off (3) 1,492 - 565 - P urchase account ing adjustment (2) 10,562 (1) 7,680 3,567 113 Restructur ing expense 7,509 8,537 1,838 2,584 Equity-based compensat ion expense 10,745 7,338 3,215 1,901 Amortiza tion expense Adjustment s: ($70,558) ($7,435) ($77,077) $20,537 Operat ing i ncome (loss) 2008 2009 2008 2009 December 31, December 31, Year ended Three months ended

Segment Bookings, Revenues & Reconc ilia tion (in thousands) ** Refer to footnotes on Reconci liati on for further de tai ls. (unaudited) $ 35,972 $ 17,950 $ 8,045 $ 25,135 EBITA ** 73,322 304 73,037 - Asse t impairment charge 2,900 1,526 2,900 - Inventory write -off 1,492 - 565 - Purchase account ing adjustment 10,562 7,680 3,567 113 Restructur ing expense 7,509 8,537 1,838 2,584 Equity -based compensat ion expense 10,745 7,338 3,215 1,901 Amortiza tion expense $ (70,558) $ (7,435) $ (77,077) $ 20,537 Operat ing i ncome (loss) $ 442,809 $ 380,149 $ 110,344 $ 146,367 Revenues $ 424,437 $ 639,542 $ 88,501 $ 262,185 Bookings Total $ (9,220) $ (10,598) $ (1,663) $ (4,455) Loss ** 285 - - - Asse t impa irment charge 8,296 635 2,059 49 Restructur ing expense 5,166 5,169 1,108 1,574 Equity -based compensat ion expense 448 432 109 211 Amortiza tion expense $ (23,415) $ (16,834) $ (4,939) $ (6,289) Operat ing ( loss) income Unal locat ed Corporate $ (2,637) $ (3,931) $ (3,852) $ 1,378 EBITA (Los s)** 21,935 - 21,935 - Asse t impairment charge 2,900 - 2,900 - Inventory write -off 1,138 2,843 511 46 Restructur ing expense 858 990 261 143 Equity -based compensat ion expense 1,880 2,170 585 508 Amortiza tion expense $ (31,348) $ (9,934) $ (30,044) $ 681 Operat ing i ncome (loss) $ 127,874 $ 97,737 $ 27,710 $ 27,224 Revenues $ 125,622 $ 101,261 $ 30,884 $ 32,375 Bookings Metrol ogy $ 20,867 $ 25 $ 9,728 $ 1,168 EBITA ** 51,102 304 51,102 - Asse t impairment charge - 1,526 - - Inventory write -off 396 3,006 272 (49) Restructur ing expense 990 1,020 297 128 Equity -based compensat ion expense 3,790 1,599 934 386 Amortiza tion expense $ (35,411) $ (7,430) $ (42,877) $ 703 Operat ing i ncome (loss) $ 149,123 $ 77,259 $ 45,026 $ 21,040 Revenues $ 138,653 $ 97,497 $ 13,968 $ 53,118 Bookings Data Storage Process Equipment $ 26,962 $ 32,454 $ 3,832 $ 27,044 EBITA ** 1,492 - 565 - P urchase account ing adjustment 732 1,196 725 67 Restructur ing expense 495 1,358 172 739 Equity -based compensat ion expense 4,627 3,137 1,587 796 Amortiza tion expense $ 19,616 $ 26,763 $ 783 $ 25,442 Operat ing i ncome $ 165,812 $ 205,153 $ 37,608 $ 98,103 Revenues $ 160,162 $ 440,784 $ 43,649 $ 176,692 Bookings LED & Solar Proces s Equipment 2008 2009 2008 2009 December 31, December 31, Year ended Three months ended

Reconc ilia tion of Operat ing Income to Income Exc ludi ng Certain I tems - Unaudited (in thousands, except pe r sha re data ) (Unaudited) Adjustment to exclude non -cash interest expense on converti bl e subordinated notes. NOTE The above reconcili ation is intended to present Veeco's opera ting results, excluding ce rt ain items and providing income taxes a t a 35% statutory ra te. This reconcili ation is not in accordance with, or an alte rna tive method for, generally accepted account ing pr inci pl es in the United Stat es, and may be di fferent f rom similar measures presented by ot he r companies. Management of the Company evalua tes pe rformance of its business units based on ea rnings be fore inte rest, income taxes and amort iza tion excluding ce rt ain items ("EBITA"), which i s the pr imary indica tor used to plan and forecast fut ure pe ri ods. The presentati on of this financia l measure facilit ates meaningful comparison with pr ior pe ri ods, as management of the Company be lieves EBITA reports base line pe rformance and thus provides use ful information. 42,000 42,000 Diluted we ighted average shares outst anding $0.50 $0.41 Income per di luted share excluding ce rt ain items $20,881 $17,328 Income excluding ce rt ain items 11,243 9,331 Income tax expense a t 35% 32,124 26,659 Income excl uding certa in items be fore income taxes (1) (741) (1) (741) Adjustment to add back non-cash portion of interest expense 1,699 1,699 Inte rest expense , ne t 33,082 27,617 excluding ce rt ain items ("EBITA") Income before interest, income taxes and amort iza tion 2,233 2,233 Equity -based compensat ion expense 1,721 1,721 Amortiza tion expense Adjustment s: $29,128 $23,663 Operat ing i ncome HIGH LOW months ended March 31, 2010 Guidance for the three

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VEECO INSTRUMENTS INCd1lge852tjjqow.cloudfront.net/CIK-0000103145/50e68...Veeco Instruments Inc. manufactures enabling soluti ons for customers in the HB-LED, solar, data storag e,